Provisional release requires demonstrable prohibition; disputed tyre classification and possible future misuse cannot justify continued detention pending adjudication.

Provisional release of seized imported tyres depends on whether the goods are demonstrably prohibited in their imported condition. The notes distinguish restricted goods from prohibited goods and state that a disputed tariff classification, possible future misuse, or quality-control requirements inapplicable to the tyres as imported cannot establish prohibition. They also explain that rectification cannot reopen a Tribunal decision using technical material not produced at the original hearing. Final classification remains for pending show-cause adjudication, while provisional release may proceed subject to imposed conditions.

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Issues: (i) Whether the rejection of the Revenue's rectification application against the Tribunal's order was sustainable; (ii) Whether the seized tyres could be denied provisional release as prohibited goods pending adjudication of their classification.

Issue (i): Whether the rejection of the Revenue's rectification application against the Tribunal's order was sustainable.

Analysis: The material comprising the technical reports had not been placed before, or relied upon by, the Tribunal when it decided the appeals. A rectification proceeding could not be used to reopen the decision on a new factual basis or to cure the Revenue's failure to produce material at the original hearing.

Conclusion: Rejection of the rectification application was sustained, in favour of the assessees.

Issue (ii): Whether the seized tyres could be denied provisional release as prohibited goods pending adjudication of their classification.

Analysis: The applicable import policy retained tyres under Customs Tariff Item 40118000 as freely importable, while restricting tyres under Customs Tariff Item 40112010. Tyres bearing speed symbol D, corresponding to a speed below 80 km/h, were outside the scope of IS 15636 and the quality-control regime requiring BIS compliance for covered commercial-vehicle tyres. The technical material did not conclusively establish that the imported tyres were prohibited goods; the later report classified them as special-use tyres based on their markings but stated that no clear criteria enabled a conclusive determination between special-use and normal-road-use tyres. Classification must turn on the goods in their imported condition, and possible subsequent misuse or end-use could not determine classification. Restricted goods are fundamentally distinct from prohibited goods, and the pending show-cause adjudication was the appropriate forum for final classification.

Conclusion: The goods were not established to be prohibited and were entitled to provisional release upon compliance with the conditions imposed by the Tribunal, in favour of the assessees.

Final Conclusion: The technical and statutory material did not justify withholding provisional release while the classification dispute remained pending before the adjudicating authority.

Ratio Decidendi: Pending final adjudication, provisional release cannot be denied under the prohibition applicable to seized goods unless the imported goods are demonstrably prohibited; a disputed classification, alleged future misuse, or non-compliance not applicable to the goods as imported is insufficient.

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